You Read in the Paper That There Has Been a Significant

question 120

Multiple Choice

You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will ________ and aggregate demand will ________.

• A) decrease; increase
• B) decrease; decrease
• C) increase; be unaffected
• D) increase; decrease
• E) increase; increase

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Definitions:

Economic Losses

Financial shortfalls that occur when a firm's total costs surpass its total revenues, leading to a negative profit margin.

Positively Correlated

Describes a relationship between events such that each event is more likely to occur if the other event also occurs.

Diversification

Diversification is an investment strategy that involves spreading investments across various assets to reduce risk and increase the potential for returns.

Positively Correlated

A relationship between two variables in which both variables move in the same direction.